Don’t Cut Corners on Comp

Polaris Sensor Technologies

If you work in the oil and gas industry, then you fully understand it is hard work with many hazards that can cause injuries and deaths in the blink of an eye. During an economic downturn like the industry is experiencing now, with over 250,000 jobs cut in 2015 and more anticipated cuts this year, it is essential that the industry continues to make employee safety not only a priority, but a core value.

During good economic times, companies often have fully staffed safety and training departments to educate employees and emphasize policies and procedures. In addition, safety and training personnel provide leadership and guidance in the areas of regulatory compliance and effective safety policies that can reduce or minimize workplace hazards.

In many organizations, the first areas targeted for reduction are departments viewed as non-revenue generating, which may include the safety and training departments. What is the message being sent by cutting safety and training personnel? Is it that safety is only a focus and value during the good times? Or is safety and training something we can really live without?

Cutting back on safety and training can be compared to a professional sports team not practicing because they are experts on how to play the game. The team continues to practice (train) to hone their skills and review plays (procedures) under guidance (safety/supervision). Safety and training personnel assist with honing the skills of the workforce by providing expertise and oversight of the organization’s safety and training programs. This is not an area where you can afford to cut corners.

Another consideration is that with jobs being cut during these difficult economic times, organizations may run with less staff and budget. In some cases, personnel may be required to work longer hours and fatigue may become an issue. Is this faster and leaner pace setting the stage for an increase in workplace incidents? Will a reduced workforce cause a loss of focus on performing job tasks safely? More incidents affect productivity, often requiring that remaining personnel work longer and harder, putting additional strain on your workforce.

When managing workplace accidents/incidents, you may be tempted to not report claims to your workers’ compensation insurance carrier. By doing so, you may not realize that the costs could far outweigh any benefit. A large portion of the oil and gas industry is covered under the Federal Workers’ Compensation Jurisdiction.

For these claims, late reporting could result in a penalty assessed of up to $11,000 by the U.S. Department of Labor. Also, mandatory Medicare reporting could result in a penalty of up to $1,000 per day per claim if claims are not reported timely. To avoid such penalties, all claims should be reported immediately to your workers’ compensation carrier so that the necessary filings can be made on your behalf, claims can be thoroughly investigated to ensure they are compensable, and workers can receive prompt and effective medical treatment.

In addition to penalties and fees, medical costs can quickly skyrocket. If claims are not effectively managed, workers will be more inclined to treat through emergency rooms. Statistics have shown emergency room visits cost up to eight times more than care received at local occupational medicine clinics. Occupational medicine clinics offer quality medical treatment and specialize in effective return-to-work practices.

Services are available to policyholders that maximize their safety and training budgets through, for example, on-site field visits, safety video streaming, online training, webinars and a mobile safety training center. Additionally, 24-hour claim reporting is available, as well as in-house medical services and bill pay units, specialized claims staff, and an occupational medicine network consisting of over 2,000 healthcare providers.

Businesses should remember that even when times are hard, workers are a crucial part of the industry. Providing timely and appropriate care for workers when they are injured on the job is not only a responsibility but it’s the law. Your workers’ compensation provider should strive to help you develop and maintain safety programs, as well as manage claims costs in order to keep employees safe and workers’ compensation costs down.

Richard Perkins contributed to this article.

Richard Perkins
Author Profile
Claims Quality Assurance Administrator -

Dawn Boniol is a claims quality assurance administrator for LWCC. Headquartered in Baton Rouge, Louisiana, LWCC is a private, nonprofit mutual insurance company that is rated “A” (Excellent) by A.M. Best Company.

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